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05/21/2006

Immigration Policy Once Again-BECKER

Although we blogged on immigration not long ago (see entry for March 6th), immigration reform is currently being extensively discussed by Congress, and President Bush proposed various immigration reforms. We decided to consider the subject once again.
I will defend three reforms. First, the United States can and should greatly increase the number of legal immigrants accepted, with most of the emphasis on skilled immigrants. Second, it is not politically possible to send back the millions of illegal immigrants that are here, but other steps might be taken with regard to their eligibility for various government programs. Third, if a feasible enforcement policy could be worked out, employers should be punished for hiring undocumented workers in order to reduce the incentives for many more illegal immigrants to come here.
The case for expanded legal immigration recognizes the great benefits this country has received from immigrants throughout our history. The unlimited immigration of the nineteenth century is no longer an attractive policy because of the artificial incentives to come created by various entitlement programs. Nevertheless, this relatively unpopulated nation can readily and productively absorb many more immigrants. Skilled immigrants in particular should receive high priority- they do not under present policies- because they add highly valued skills that are well paid in the above ground sector, and they contribute much more in taxes than they receive in government benefits from Medicaid, unemployment compensation, and other government programs. In addition, skilled immigrants commit little crime, they have law-abiding and generally high achieving children, and they supply various services that otherwise might be outsourced to countries like India and China. I would also like to admit legally some hardworking unskilled immigrants, and I will discuss this later.
Unfortunately, I do not see anything in the president's proposal to increase the number of skilled immigrants, perhaps because all the attention is now on illegal immigrants. But skilled individuals deserve a high priority. One approach is to expand greatly the number allowed to enter under temporary programs, such as the H-1B visa program mainly for high-tech workers. But programs for temporary admission are not attractive (for reasons discussed in my March 6th post), and a more desirable policy would provide permanent admission to many more skilled immigrants. More generous admission of these immigrants should be a fundamental part of any overhaul of the United States' immigration policy.
Although the exact number of illegal immigrants in this country is not known, estimates range from about five million persons to close to twelve million. Surely, it is not feasible politically to round most of these up and return them to where they came from. The recent immigrant demonstrations show that this could lead to riots and unrest that would be more destructive than helpful. Moreover, many of these immigrants are well integrated into American life, and it would make little economic sense, as well as be inhumane, to send them back, even if that were feasible. The call by some Republican to send most illegal immigrants back to where they came from seems more like political grandstanding rather than a serious proposal.
So I accept that the vast majority of illegal immigrants are here to stay for as long as they want to. The president's proposal essentially to give permanent residency to illegal immigrants who have jobs involves some face-saving because he wants to deny that he is in effect proposing to give amnesty to immigrants who are here illegally. Still, the proposal is basically a major step in the right direction, for it not only recognizes the impossibility of throwing out millions who are here illegally, but the proposal also makes a valuable distinction between those with and without jobs. That part of the proposal is consistent with the approach taken in the H-1B and other programs that gives preference to immigrants who have jobs.
If the president's proposed reforms were not to become simply another amnesty program-the previous one was in 1986- that would encourage further illegal immigration, a way must be found to discourage the number of illegal immigrants who want to come. The current policy of returning apprehended aliens is ineffective since the majority of those who are returned simply turn around and come again. Perhaps a wall along the border will help. I doubt if using the national guard to patrol borders (I do not like the use of national guards for that purpose) or many more border agents could greatly stem the tide, given the length of the border with Mexico, and the many persons who specialize in finding new ways to cross over.
Most Americans do not wish to give significant jail sentences to illegal aliens who are apprehended. For there is considerable, although not universal, sympathy for immigrants whose only crime is that they come to this country to seek much higher wages, better working conditions for themselves, and brighter futures for their children.
What then can be done? As I said in my March post, I favor reducing the benefits available to illegal immigrants, which means denying them access to most health, education, and other benefits. But I recognize that it is unlikely if that would be politically feasible or desirable in certain situations, such as for illegals who have school age children, or those who are ill. So I am not optimistic about the feasibility of doing much along these lines.
Clearly, it would help a lot if Mexico developed much faster. Its record during the past several years is pretty good, due mainly to the NAFTA Free Trade agreement, various reforms Mexico introduced to make its economy more flexible, and a booming world economy. Still, Mexico is unlikely to increase its progress sufficiently rapidly to greatly reduce the desire of many Mexicans to come to the United States in the forseeable future.
It would be desirable to increase significantly the number of unskilled persons accepted each year, along with the greater increase in skilled individuals accepted, although neither group should be eligible for entitlement benefits for several years. This policy would reduce the number of unskilled persons who want to come here illegally, but it would not eliminate the problem.
So is stemming further large-scale illegal immigration a hopeless task? Perhaps it is, which is why I titled my previous entry "The New American Dilemma: Illegal Immigration". But an approach that I dismissed in my March post may be worth exploring further. Although the 1986 immigration law barred employers from hiring illegal immigrants, it has not been much enforced because employers argued they were victims of forged social security cards, green cards, and other ID's that would certify employees were in this country legally. An identity card that is hard to duplicate and that would have to be checked by employers at a central clearing house before hiring someone would be the only really effective method of reducing forgery to minor levels. That would have to be combined with sizeable monetary fines for employers who hired employees without the required documentation. These fines should rise with the number of illegal aliens hired, and with whether an employer was a repeat offender.
Even if such an identity and punishment system were introduced and were effective, some illegal immigrants would come here to work for households and at other underground activities. But identity cards would greatly cut back the number of illegal immigrants who would come. That is all any policy toward illegal immigrants can hope to achieve.

Comments

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Who will care for the citizen children of men nabbed at their jobs by the INS.? High functioning men with value creating jobs are going to be arrested and deported. In the barrios of our cities and towns will be families waiting for fathers and their paychecks who have disappeared. Some of these little folksí lives will be ruined before they have begun. It isn't worth it.

Is this for real? Are you really saying that we shouldn't enforce our laws, because the criminals might riot in response? That we should now surrender our borders to illegal aliens because they might not take kindly to actual immigration law enforcement? Why not extend this idea to bank robbers and drug dealers? They don't generally approve of law enforcement either.

For the record, President Eisenhower deported roughly 1 million illegal aliens back in the 1950s with only a minimal effort (around 700 agents). Protests were few, in any. None were violent to the best of my knowledge. More recently, Malaysia deported about as many illegals as we have (relative to its population). The effort was quite smooth.

It is impossible to know if a resumption of immigration enforcement would trigger material violence. However, if it did, then we as a nation would have reached our "Fort Sumter" moment. That is the point where debate about illegal immigration ends and we have to admit that we are dealing with an invasion of our country.

The Constitution of the United States (Article IV, Section 4) calls upon the government to "guarantee to every State in this Union a Republican Form of Government, and shall protect each of them against Invasion". Clearly the Federal Government is required to use whatever degree of force is required to repel a foreign invasion.

I agree with Becker. We should significantly increase the number of high and low skill legal immigrants accepted. Reducing benefits available to illegal immigrants is not likely politically feasible and may be undesirable. It may reduce the incentive to come here illegally at the margins yet the policy trade-off between entitlement disincentives and humanitarian concerns likely favors the later.

I also agree that a biometric card and employer enforcement would be a prudent policy. It is not a perfect solution but may be the best politically feasible solution available. Yet greater employer enforcement will cause economic disruption in certain industries. Expect political blow-back from business.

There is no perfect solution to illegal immigration. We have policy options with trade-offs. Increasing the number of legal immigrants accepted along with tough employer enforcement are the best policy options for a strong economy and to curtail illegal immigration.

I agree with most of your comments. Giving the right incentives is the key. Having all the illegal immigrants registered is key to keep this matter under control. The technology is on our side. The Federal governement could ask the employers to have all their non American people being registered through the internet using a finger print device (the cost of a USB is very low). In a year we could have the information in a system and start to make the background checks. In this first year we wouldn't have any enforcement action to give an incentive to the employers to register their people. Any immigrant cleared after criminal checks could be given a guest permit for 5 years, get a SS number and pay his/her taxes. Any employer who doesn't meet the law requirement after one year would face serious penalties. The guest permit could be renewed and won't give the immigrant an automatic access to a green card and citizenship.
We could control the number of immigrants coming from this category to whom we grant the citizenship and keep the balance between skilled workers and unshkilled one.
Obviously one of the problem to solve would be to have the systems in place to register, but the Governement could subcontract to the private sector to make sure we meet the deadlines.

Would it be a good idea for the US to automatically accept anyone with a bachelor's degree or better from an accredited institution (assuming they don't have a criminal background)? It would be great for America and do wonders for our economy, but perhaps it might be worse for us in the long term if there is such a huge brain drain from the third world as it may further destabilize many countries.

What many people do not see is the problem that arises when these presently illegal aliens become citizens.

When this happens, minimum wage laws will become effective and they will lose the very jobs they had to become citizens. The vast majority are undocumented and work in cash businesses that skirt the laws and the IRS.

Couple this with the Democrats minimum wage increase (they will push for it because they always do) then we will have a whole new class of welfare recipients to deal with. How long before we have generations of families on the dole because of this awful plan?

Prof Becker and Judge Posner shouldn't let their professions as economists get carried away. The economic case for immigration may well be unanswerable. But money isn't the only thing. Immigration contributes in other ways, by the introduction of new cultures, but there comes a time when the hosts begin to feel overwhelmed.

Fiji has endured military coups and other disasters since 1987, because in that year the indigenous population found themselves governed by someone else. That isn't something America would want, I am sure (and yes, I know that the real indigenous people of America have already had a rough time of it from the group of immigrants who now consider themselves American nationals).

Why not allow U.S. employers to pay minimum wages prevailing in Mexico plus a border-crossing premium (which I would term Mexico Grande wages) instead of U.S. minimum wages. For each illegal immigrant employee reported to IRS, the employer is allowed to pay only half of the difference between U.S. minimum wage and Mexico Grande wages to the social security fund. The employer gains by having to pay below minimum wage, the U.S. government gains by collecting social security for potential future citizens, illegal immigrants gain (to an extent) by getting a wage above Mexico but below American standards, the national interests of U.S. are served by dramatically reducing the incentive for illegal immigration from Mexico and other countries.

Professor Becker should realize that the Senate bill is an intentional fraud on the American people. For example, although President Bush advocates a "temporary" workers program, using the word "temporary" six times in his latest speech, the current Senate bill would allow almost all the "temporary" workers to become permanent legal residents. When conservatives Senators tried to amend the bill to fix this, Sen. Hagel got the Bush Administration to announce, in effect, that the President had lied -- he wants the "temporary" workers to be permanent. For details, see:

GB: are you trying to claim immigrants are attracted by entitlement programs and that entitlement programs are the only justification for immigration restrictions?! I'm quite sure the majority of immigrants don't come for social security and medicare. At the very least, there's much more generous welfare systems in other parts of the developed world YET the immigrants (not just those conveniently located across the border) still prefer the US.

what most immigrants come for is: 1. opportunity in both jobs and consumption 2. safety and security. I'm sure that entitlements contribute to 1&2, but I think its second order. Lets not forget about the value of free speech, human rights (such as the right to a "fair" trial) and other externalities flowing from living in a civil and accepting society. I suspect that, rightly or wrongly, many opponents of immigration fear erosion of these institutions more than they fear the added burden of entitlements, its just that pretending the issue is about money is more PC.

Also, what's with the narrow US centric approach to immigration? As BL above asks, how about some thoughts on the effect of skilled migration on developing nations?

Growing up in eastern North Carolina in a small farm town, I have known many illegal immigrants and I attended grade school with the children of illegal immigrants. Most of these children were actually American citizens, but their parents were in the country illegally. The kids would often disappear from the school system because the parents were sent back to Mexico (e.g. Dad got a DUI), or the family would only be in the country for 7-8 months per year and the kids would miss a large part of the school year. (Given the increased border security, I suspect this is less common today) My proposal is to change the age at which American Citizens can sponsor their parents from 18 to 1 day old, but with a caveat. Each year the age at which children can sponsor their parents would increase by 1 year. Increasing the age requirement by one year would eliminate the obvious moral hazard, and the policy may be politically feasible since it is not an amnesty policy, but rather a slight modification to the existing policy. It would go a long way towards helping out some worthy families.

These days, people seem to want their governments to agressively pursue a specific ideological agenda. People seem to require political candidates to have some broad ideological agenda that will (supposedly) transform the world.Personally, I don't want a government with an ideological agenda. I don't even want the government to have a plan other than "get the job done". Basically, I want a government that collects taxes and provides basic government services as efficiently as possible and leaves it at that.If there's any question as to what approach is most efficient or how the government should spend its limited resources then the government should base its decisions on practical observation-based considerations rather than some broad ideological agenda.I want a reality based government that does what it needs to do. I definitely don't want a vast bureaucracy that will plan my life for me and tell me where I can live and where I can work and where I can travel.When it comes to immigration, I don't want the government to get involved unless it is clear that it is necessary based on practical reality-based observations. In particular, I don't want the government to get involved in immigration on the basis of unsubstantiated speculation or wild theories that come from its extreme ideological agenda.For example, if the USA was experiencing weekly terrorist attacks and most of the terrorists were coming across a particular place in the Mexican border then I would support sending the National Guard to patrol that place along the Mexican border. On the other hand, if there was only unsubstantiated speculation that a terrorist might someday in the future sneak across the Mexican border then I would oppose using the National Guard to patrol the Mexican border for terrorists. In fact, I wouldn't want the National Guard interfereing with my freedom to travel to Mexico at all.Similarly, if there is concern that Mexican immigrants are placing (or will place) a strain on the US government services then, in my view, the government should actually do some reality based calculations to determine the extent of the problem.In particular, simple calculations indicate that immigrants from Mexico aren't a significant concern with respect to straining social services. The entire population of Mexico is only 100 million. That's about 30% of the US population. Even if the entire population of Mexico moved to the USA and didn't provide any additional tax revenue and taxes in the USA were held constant, social services would only be hurt by 30%. For example, a school that had 23 students per class would end up with 30 students per class. That's a bit cozy but by no means apocalyptic.If taxes were increased to provide additional services then that would involve increasing about half the USA budget by 30% (still assuming the Mexicans didn't pay their share of the taxes). That would be a few hundred billion a year. A few hundred billion a year is not insignificant but it's about the same order of magnitude as the cost of the Iraq war or the interest that the USA is paying on the national debt.On a practical level, having lived within view of the Mexican border in San Diego and now living in the Los Angeles area, I don't see any conclusive evidence that Mexican immigrants are creating a problem. In terms of things like crime and social decay, Southern California is quite a bit better than where I used to live in Michigan.No place in the USA is perfect, but factual observations are simply not consistent with the idea that Mexican immigrants have transformed southern California into a lawless wasteland of third world poverty.There are certainly wildly speculative theories based on certain ideological agendas that allowing too many Mexican immigrants would destroy the very fabric of US society. Personally, however, I don't want a government that bases its policies on wild ideologically driven speculation.

If the reason for numerical quotas on immigration is to prevent too many immigrants from coming here to take advantage of entitlements, why don't we change the entitlements rather than blame the immigration policy or the immigrants?

For example, we could limit eligibility for food stamps, public housing, and other forms of welfare to citizens, or to people who have been legal residents for (say) five years. Public schooling for children of immigrants could be limited to those with at least one employed parent (perhaps until the parent(s) and child have been in the country for a certain number of years, or until they become citizens).

All we need is enough of a restriction to ensure that there is no incentive to immigrate with the intent of collecting benefits rather than without working. If we set the restrictions correctly, the preferences of the immigrants, together with the labor market, will choose the optimal level of immigration.

Isn't this better than setting arbitrary quotas, even if those quotas are based on arbitrary measures of skills?

In fact -- and I truly mean no disrespect -- I think this is a lot closer to what you taught me in Econ 301 than what you suggested above.

I appreciate Prof. Becker's pragmatic remarks concerning the immigration issue, with one exception. He observes, without elaboration, that "this relatively unpopulated nation can readily and productively support many more immigrants." Where Prof. Becker gets this "relatively unpopulated nation" notion is somewhat of a mystery. Maybe he refers to the fact that we have a lot of unoccupied square footage in America. Why should filling our real estate to capacity be a desirable, let alone sustainable, public policy? And to argue that acquiescing to the intrusion of illegal trespassers into our nation is tolerable because "there's lots of room" simply ignores the economic conditions that endure on our southern border, for decades a laboratory for the consequences of illegal immigration. Should Prof. Becker choose to spend a month in a border town -- Del Rio, Texas, for example -- he might at least attempt to offer a rationalization for toothless immigration policies that will extend such squalor and lawlessness throughout the rest of the United States.

The "relatively unpopulated nation" idea has many other flaws, but I leave that to any interested historians and environmentalists who may join the discussion.

I agree with the fact that the emphasis should on skilled labor and I solely regret the fact the immigration debate has become mostly an identity issue and has focused socely on illegal immigration. The sad reality is that it isn't easy for people who had the skilled and the talents which the US needs are having a tough time immigrating to the US because the process is not only slow, but also archaic and too cumbersome.
I think that the people who have pro-immigration have allowed the debate to become about fear and national identity. They should have personalized the issue, but showing that immigrants are for the most part people who are trying to achieve the american dream.

When I read that illegal immigration has reduced the hourly wage of a high school graduate by 8%, and I realize that a well-educated engineer will not take the risk of being here illegally, I wonder whether our immigration non-policy has only the purpose or the effect of depressing the income levels of the poor.
Once here, I can just imagine the outrage if a illegal immigrant is kicked out of a hospital to die in the street or infect the community with an untreated communicable disease. Good luck. We know that won't happen.
So, who should be taxed for these services and the cost of illegal immigration. I say tax the employer who hired an undocumented immigrant and use the money to pay for their social services. Markets work.

kiki, That slowness, archaiism, and cumbersomeness is all part of the system design. It's there to slow down the velocity of flow, acceptance and ultimately immigrants; so that the appropriate Governmental Agencies can do the proper back ground checks prior to approval. The legal immigrant is not the problem. The illegal and undocumented is. As is witnessed by the mass and velocity of flow of these types currently and hence the Administration and Congress's current actions.

One thing that stumps me about immigration reform is the guarantee of US citizenship purely die to the fact that you are born on native US soil.

I agree with Dr. Becker that we need immigrants. I would propose a similar plan, and set up mini-Ellis Islands at the border. I would fingerprint, DNA print, and issue a immigrant number to each person coming in. Each would get a basic medical examination in order to guarantee that they are not bringing any harmful viruses or diseases into the country. Employers would record their immigrant number and pay taxes accordingly.

We would amend the Constitutional provision on citizenship. In order to become an American citizen, you should have at least one parent be an American citizen.

Existing illegals could go to an immigration agency in or near where they live now and get their card and number, along with the fingerprint and DNA.

The key is enforcement by the employers, and making sure employment taxes are paid. I would also be willing to start an income tax on the people that worked here as immigrants. A better idea would be to scrap the income tax altogether and go to a straight consumption type tax that taxed everyone. It would also be beneficial by taxing some of the underground economy that exists today.

...I can just imagine the outrage if a illegal immigrant is kicked out of a hospital to die in the street...Kicking a terminally ill US citizen out in the street to die would generate outrage, too.However, if a choice had to be made between spending $100,000 to keep one terminally ill American alive for a few extra months or spending $100,000 to give a thousand Mexican kids antibiotics that would allow them to live full lives rather than die as children, I'd be inclined to help the children.The broader question is whether, when it comes to health care, the US government is supposed to be an insurance agency or a charity. To me, the charity function seems much more compelling.If a particular American really wants to have $100,000 spent keeping him alive for a few extra months when he's about to die anyway then he can buy (private) insurance for that.On the other hand, the reality is that some people don't have the resources to provide themselves with basic healthcare. If these people are to receive basic healthcare then it needs to come from the government.Rather than quibbling about who gets basic healthcare, an upper limit needs to be placed on how much healthcare the government provides to any one person (particularly the terminally ill). It would be great if the government could provide unlimited services to everyone. The reality is that the government is already massively in debt and it simply isn't possible to provide everyone with as much government services as they can consume.Government services, particularly healthcare, must be rationed and the best rationing gives everyone a little bit rather than a lot to a few people.

One thing that stumps me about immigration reform is the guarantee of US citizenship purely die to the fact that you are born on native US soil.And what stumps me is the guarantee of citizenship based on who your parents were. I mean, what next? Are we going to throw children in jail for crimes committed by their parents? What we should do is evaluate each person in the world for their expected contribution to American society and then grant citizenship only to the top 300 million. For those people actually living in the USA we should do a "performance review" every couple years and if their performance falls below that expected of the top potential immigrants then those Americans should be deported to make room for the superior immigrants.Of course, if we actually believed in freedom then we wouldn't want vast government bureaucracies telling people where they could live and work and travel at all. We would let individuals make such decisions for themselves based on their own individual reasons.

"On the other hand, the reality is that some people don't have the resources to provide themselves with basic healthcare. If these people are to receive basic healthcare then it needs to come from the government."

And aren't you happy to let as many of these people in to the US, so that the American taxpayer can pay the bill! That's awfully nice of you, Wes, playing Mr. Good Guy with other people's money.

The problem with the alternatives being presented in the current immigration debate is that none of them align the incentives properly. Either they encourage more illegal immigration, or they encourage businesses not to cooperate with enforcemente efforts. Except my proposal below. But first, I want to remind everyone that "amnesty" in any degree would not undermine the rule of law in this country, as many have argued. If you are at all familiar with the justice system, plea bargains are offered, sentences reduced, and all kinds of deals cut. Yes, illegal immigrants have broken the law, but there is no reason a payment of a fine and back taxes shouldn't be enough of a punishment. Violent offenders can get away with no jail time and suspended sentence, there is no need to punish people who came to work any more severely. Of course, this does not apply to illegal immigrants who have broken other laws.

Anyway, my idea for immigration reform is as follows. Illegal workers who immigrated after a certain date, who can show gainful employment and have committed no crimes could become legal if they simply reported. Since it is beyond impractical to deport millions of people, and as I said earlier, a payment of a fine and back taxes should be sufficient a precondition for becoming a legal alien. The reporting period of these aliens should be a few months, at least until the end of this year, to allow for a smooth transition. [I don't really care if these people merely become legal permanent residents or American citizens. While most of them would prefer the latter, I am not convinced that it is unreasonable to deny them full citizenship. Their children who are born here, however, would be citizens.][I also don't care what cutoff date is selected. It could be today, or at any point in the last five years. A future date would obviously encourage more immigration.]

The centerpiece of my reform idea, however, is related to American employers. The law should provide that any illegal alien that has not reported by the deadline and that is employed by an American business for less than the minimum wage may report that to the authorities. That alien would than join those who reported on the track to citizenship/permanent legal residence, and would also be entitled to a lump sum payment from their employer. The payment should be a significant one, maybe something like $10,000 to $20,000, perhaps escalating with lenght of employment.

This last provision would encourage those illegals working below the minimum wage to report their employers, while it would discourage employers from hiring illegal immigrants and thus discourage illegal immigration in the first place. The provision must be dated in the future to allow businesses to adjust and find new workers before they have to either up the wages of their current illegal workers or find new ones. Workers getting paid more than the minimum wage would not be affected by this, and they would simply report under the first option. The only people who would not be incentivize to report their employer would be those who immigrated after the cutoff date, but that problem can be minimized by moving the cutoff date closer to the present.

I could describe this all in greater detail, but this post is entirely too long already. The business community would fight this idea to the death, but I see it as a practical solution.